FROM THE OFFICE OF CHILD CARE

1/11/17

Dear Colleague:

As we begin a new year, it’s natural to take stock of our priorities as we move forward. Fortunately, the recognition of the importance of child care to child development and family economic stability continues to grow.

The Child Care and Development Block Grant (CCDBG) Act was updated and reauthorized with bipartisan support by Congress in 2014 to better meet these dual goals. A report issued last month provides information on the reach of the Child Care and Development Fund (CCDF) program, the Nation’s largest funding source for child care assistance to help parents who are working or in education/training to pay for child care and to improve the quality of care for all children. States, Territories, and Tribes use CCDF funds to serve their unique populations and to have some flexibility in setting specific policies that govern the everyday experiences of over 1 million children, their families, and the early childhood workforce that nurtures them, and our collective future, each day.

The CCDBG Act of 2014 required the U.S. Government Accountability Office (GAO) to examine the extent of participation in the CCDF program across States. The resulting report, Access to Subsidies and Strategies to Manage Demand Vary Across States, found that approximately 14.2 million children under age 13 were in families estimated to be eligible for CCDF subsidies in an average month. These figures are based on the Federal limit on eligibility, which allows States, Territories, and Tribes to set maximum income eligibility no higher than 85% of State Median Income (SMI) and which requires families to qualify based on their participation in work or education/training. According to the Census Bureau, nationally, 85% of SMI translates to a family income of roughly $45,000 per year.Statesmay set the threshold lower and add other eligibility criteria. The GAO found the total number eligible when these criteria are applied is 8.6 million. Of those, GAO found that 1.5 million children in eligible families received child care subsidies in the years for which the data were reviewed (2011 and 2012). That number translates into just 11% of federally eligible children receiving CCDF subsidies. Please view the chart on page 10 of the report for a graphic illustrating these results.

Before, we typically used the figure of 15% of children federally eligible for CCDF who could access the program, based on an analysis published by the Assistant Secretary of Planning and Evaluation in 2015. Now, GAO’s calculations show just 11% benefit from access to this important support that helps families choose child care so that they can work or attend school. This current situation is a lost opportunity to strengthen American families and children’s prospects for their future.

Over three-quarters (77%) of children receiving a subsidy lived in families with income under 150% of the Federal poverty level, with 60% below poverty. Poverty wages meant earnings less than $23,000 for a family of four in 2012, the most recent year of data that GAO analyzed. The average price of child care for an infant care in a center is over $10,000 a year, although it varies depending on the cost of living in different areas.

When more families ask for a subsidy than a State can serve, it leads to difficult choices. GAO asked 32 States questions about how they manage the demand for child care subsidies. States mentioned using wait lists, prioritization criteria, and closing intake.

With the birth of a new year, like the birth of a child, comes new potential and promise. Thank you to all who will be a part of realizing that potential and promise for children, families, and the early childhood workforce in 2017.

Sincerely,

Rachel Schumacher